The Modi government has recently taken two big decisions related to LPG cylinders and Pradhan Mantri Ujjwala Yojana. One of these decisions is for gas cylinder users, and the other is for oil companies. The government has announced to compensate the loss of Rs 30,000 crore to the oil marketing companies (OMCs) in installments. Along with this, the number of subsidized cylinders available under the PM Ujjwala Yojana has been reduced from 12 to 9. This decision may not have a direct impact on your pocket, but it is very important to know about it. Let us understand every special thing related to these decisions in detail.
Oil companies will get compensation of ₹ 30,000 crore in installments
The government has taken a big step to compensate the loss of ₹ 30,000 crore to oil companies due to selling LPG cylinders at a price lower than the cost. The cabinet has approved giving this compensation in 12 installments. The first installment under this scheme is expected to be released in September-October this year.
Why payment in installments
The government has decided to divide this compensation of Rs 30,000 crore into two financial years (FY 2026 and FY 2027). ₹15,000 crore will be given in this financial year 2026, and the remaining amount will be given in the budget of the next financial year 2027. The purpose of making payment in this way is to keep the fiscal deficit low. If such a huge amount were given at once, the fiscal deficit could have increased by 8 basis points. The government has set a target of keeping the fiscal deficit at 4.4% of GDP for this financial year 2026.
What will be the impact on the subsidy in the PM-Ujjwala Yojana
The cabinet has reduced the number of subsidized cylinders available under the PM-Ujjwala scheme to 9, but the relief is that there has been no cut in the subsidy per cylinder. The government has retained the subsidy of ₹ 300 on a 14.2 kg cylinder. A budget of ₹ 12,060 crore has also been approved for this scheme for the financial year 2026. According to government data, LPG consumption by families associated with the PM Ujjwala Yojana has improved. The average consumption per person was 3 refills in FY 2020, which has increased to 4.47 in FY 2025.
This decision shows that the government is trying to provide relief to needy families while also maintaining economic stability. However, the reduction in the number of subsidized cylinders may make cylinder management a challenge for the beneficiaries of the Ujjwala Yojana.